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Preview / WEEK OF JUNE 10-16

ImClone's New CEO to Face Lawmakers

June 10, 2002|Reuters

Harlan Waksal, tapped three weeks ago to take the reins from his brother at struggling biotech ImClone Systems Inc., faces a week of grilling from shareholders and lawmakers about whether company executives defrauded investors while enriching themselves and those close to them.

Tuesday, shareholders at the company's annual meeting are likely to take Waksal to task about ImClone's failure to alert them to potential delays in getting its experimental cancer drug, Erbitux, approved by regulators.

Two days later, Waksal is set to appear before a congressional panel that hopes to find out whether ImClone misled shareholders and if top executives profited from illegal trading.

Waksal was ImClone's chief operating officer until three weeks ago, when his brother Samuel resigned from the top job amid renewed criticism.

Harlan agreed to cooperate with the congressional committee, but Samuel is resisting. It is unclear whether Samuel will testify at the hearing. Legal experts say he probably will take the 5th Amendment against self-incrimination.

A spokesman for Samuel said the ex-CEO and his lawyer still are evaluating whether he will testify and respond to congressional questions at the hearing. A spokesman for Harlan said the ImClone chief will appear at both meetings.

In the 48 hours leading up to the company's announcement Dec. 28 that the Food and Drug Administration had refused to review Erbitux, citing flaws in the drug's clinical trials, five members of Samuel's family, as well as former girlfriend and style guru Martha Stewart, sold stock in ImClone.

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